Every year many students fly abroad from India to pursue higher education. After reaching there, they face several challenges and one of the biggest challenges is that they do not have a local credit history. So they cannot avail a range of financial services, including a loan or a credit card -- at least not without paying a premium for it.
Indian students studying abroad need to pay a higher interest rate compared to their local peers who can secure the same amount of credit, if not more, at less than half of that interest rate.
Understand the problem, Leap Finance which is a two year old startup with headquarters in San Francisco and Bangalore is trying to solve the problem. The startup grants loans to students at a fair interest rate by evaluating the data they generated -- alternative and derived -- in India itself.
this, the startup also solves various other problems of the students.
Arnav Kumar, co-founder of Leap said that at present the company is helping students with guidance on admission, visas, and test preparation. The company has also formed a social network of sorts where over half a million students are interacting with one another and use the platform’s other services to get admission in a college abroad.
Kumar, who previously served as associate VP at venture firm Elevation Capital, said Leap’s community today is replicating the offline-behavior. Some students, to be sure, reach out to others on LinkedIn, or Facebook. But by just focusing on one problem, Leap is attempting to become the community for students who are looking to pursue higher education. (Its pages are indexed on Google search for better visibility.)
There is a massive opportunity for startups to better solve these problems.
Vaibhav Singh, the other co-founder of Leap said that each year students from India take admission in over 5,000 schools and universities abroad for tens of thousands of courses.
“So the choice spectrum is really, really wide and you need experts who can help you make the right choice. This is the most important decision you or your family will make,” he said.
Understand the opportunity in this space, the investors are backing the startup. It said that it has raised $17 million in its Series B round. The new financing round was led by Singapore-based Jungle Ventures, along with Sequoia Capital India and Owl Ventures. The startup has to date raised $22.5 million.
The global pandemic prevented many Indian students from traveling abroad. This year, more than 700,000 students are estimated to leave India to pursue higher education. Leap co-founders said they are working to serve 150,000 of such students this year.
The fresh capital that Leap has raised will be used to expand its tech team and reach more geographies. The startup currently helps students join colleges in several countries, including the U.S., Canada, the U.K. and Australia. Singh said Leap is also looking to hire some tech and business talent.
